SamTinnerholm
today at 2:04 PM
Nice paper, and thanks for releasing the dataset.
The "top-1% winners are patient limit-order liquidity providers, not insiders" finding is interesting, and I'd love to see it extended cross-venue.
I work on tooling that normalizes orderbooks across Polymarket, Kalshi, Limitless, and Smarkets. From that angle, a lot of what looks locally like skilled Polymarket market-making turns out to be cross-venue arbitrage that happens to land on Polymarket. The same underlying question routinely trades 3-8% apart across venues for hours at meaningful depth, and a fast multi-venue stack rests limits on the lagging book at the exact moments the leading book moves. Locally that's indistinguishable from disciplined liquidity provision; cross-venue it's closer to FX triangular arb on the consensus price.
If your timestamps are fine-grained enough, a clean follow-up: for the top 1% of Polymarket profit-takers, what fraction of fills land within N seconds of a same-question move on Kalshi or Limitless? If it's materially above baseline, some of "skill" resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha, so it could partly explain the weak monthly persistence you observe (the cross-venue gap closes when too many players run the same stack).
This might also be consistent with your insider-trading conclusion rather than against it: an insider on a real-world event has every reason to hit the lowest-friction venue with aggressive market orders (Polymarket: permissionless wallets, no KYC, no withdrawal limits). That's a fundamentally different profile from the patient limit-posting strategy your top bucket runs, so the two populations cleanly separate in the data even if both are present.
We have a grad student working on matching markets across venues. Not a trivial task at scale, but we hope to look at that eventually.
locallost
today at 3:03 PM
I don't think that's surprising because the alternative would be that some people are able to predict the future. Whatever strategy one might figure out that works is long term destined to fail, as other people start using them. The only real way to make money there is by providing liquidity since it's a zero sum game. For the stock market this is not true because it's not zero sum, it grows over time.
cortesoft
today at 3:24 PM
There is alternative to being “able to predict the future”, which is “I already know the future” or “I can change the future”
mathgradthrow
today at 4:16 PM
Someone flips a coin and looks at it, what orders are you willing to put in?
The potential for insiders should be represented by a complete loss of liquidity.
"predicting the future" and "correct analysis of all available information" often aren't all that different.
A sufficiently large market is indistinguishable from Brownian motion.
AnimalMuppet
today at 3:32 PM
From Schlock Mercenary (quoted from memory, may be inexact):
"You cannot see the future. All we are given is the present."
"Of course. But if you look closely at the present, you can find loose bits of the future just laying around."
Not really. Not all players in prediction markets are rational players. A good chunk of it are there for entertainment, and analyze things incorrectly; you can take the other side of those trades, and you won't need to predict the future.
Yes, but the alternative (that some people are very good at forecasting) is also plausible. It's also useful to have a good prediction model and timely data sources when providing liquidity. We also find that some of the "biggest losers" also provide liquidity; they just aren't as good at it.
The stock market is arguably zero sum as well, just that directionally betting on the US has generally worked during the golden years of the US economy.
The stock markets of the world aren't a money printer.
There's probably also some hedging going on across accounts that look like directional bets.
postflopclarity
today at 2:44 PM
this comment was clearly written by AI. please don't do that.
Not sure why you were downvoted/flagged, because you're right. It is also quite an insightful comment worthy of discussion so I'm a little conflicted.
It looks completely fine and plausible to me. Which is worrying.
I don’t see why it’s AI, but even if it is, it’s better than most human comments so the complaint should be downvoted.
Take a look at the user's history, it's more obvious in context. It has a lot of claude-specific tells which are noticeable if you've spent time working with claude. AI-generated comments are against the HN guidelines https://news.ycombinator.com/newsguidelines.html#generated
Maybe the guidelines should be changed? Something about: don’t complain about comments just because they’re AI.
postflopclarity
today at 4:06 PM
I'm not complaining "just" because it's AI.
I'm complaining because it's AI, and also slop.
> resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha
anybody who actually trades knows that on these markets, "cross venue infrastructure" (aka vibe coding some exchange api integrations) is much less important / durable than actual alpha.
nh23423fefe
today at 3:49 PM
phrenology
postflopclarity
today at 4:07 PM
if you're not able to tell that OP's comment was AI slop, then you probably don't have much insight to contribute to the conversation either.
postflopclarity
today at 4:08 PM
it's only "better than human comments" if you have no idea what profitable trading looks like. it's a very-very thin mildly convincing veneer over what is fundamentally slop.